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More bribery prosecutions imminent as SFO confirms eight cases under investigation

Out-Law News | 05 Sep 2013 | 9:51 am | 2 min. read

The head of the Serious Fraud Office (SFO) has responded to critics of the UK's new anti-corruption legislation, confirming that the department has eight cases under investigation.

David Green used his speech at an industry conference hosted by the Cambridge Economic Symposium to defend the department's performance in relation to the Bribery Act, which came into force in July 2011. The SFO only made its first charges under the new regime last month, and is yet to prosecute a corporate offender.

Green said that the SFO had made "radical changes" since he took charge, and was focused on its role as investigator and prosecutor of the "topmost tier" of offences. It was also "in the process of ramping up" its intelligence capability, he said.

"If the public interest requires more corporate prosecutions, then such a change is high on my wish list," he said.

"It is my intention to recharge the SFO's corporate self-respect and to bring it to the top of its game as a specialist investigator and prosecutor of the topmost tier of serious and complex fraud, bribery and corruption. The SFO's problems are not over, but we are set firmly on an upward trajectory," he said.

Green also dismissed critics of the legislation, who have called for an early review and a lessening of compliance burdens. He said that "the argument that a bribe is just the necessary price for doing business abroad" was unacceptable.

The Bribery Act came into force in July 2011 and, broadly speaking, states that companies with a presence in the UK can face prosecution for bribery or failing to prevent bribery regardless of where the alleged activity has taken place. Importantly, a company can also be responsible for bribery carried out by its employees or third-party agents without its knowledge or consent. Companies can be found guilty of failing to prevent bribery by people working for or on behalf of the business, unless the company can show that they have "adequate procedures" designed to prevent bribery in place.

One of Green's first acts as SFO Director was to remove, the preference for civil settlement with when those companies voluntarily report acts of corruption that they have uncovered themselves, from its guidance. Previous guidance had suggested that those companies would be looked on more favourably, and may receive civil penalties rather than criminal. The new guidance explicitly states that firms which self-report could still be prosecuted where there is a "reasonable prospect of conviction" and it is "in the public interest to do so".

"[The revised guidance] was necessary because the previous guidance implied that a corporate self-report guaranteed a civil rather than a criminal outcome," Green said in his speech.

"No prosecutor should be giving that sort of guarantee in advance. Instead, we apply the full code test to the evidence. In that process, the fact of a genuine self-report is capable of being a decisive factor in the application of the public interest limb of the code test," he said.

Writing on his website, thebriberyact.com, anti-corruption law expert Barry Vitou of Pinsent Masons, the law firm behind Out-Law.com, said that Green's comments indicated that "enforcement rhetoric will translate into action" in "the not too distant future".

"The update on the number of Bribery Act projects highlights that contrary to some private perceptions the risk of law enforcement action by the SFO (and other UK law enforcement) as time goes by increases as facts come to light and investigations, like fine wines, mature," he said.

"A common argument is that business cannot be done in some places without bribery. This is often used to underpin the argument that the law should be changed to allow bribery – it is not put that way, but that is the reality of the argument ... David Green is not someone known for his sympathy for those who break the law," he said.